Ottawa

Milk management fee

Barrie McKenna explores the government’s attempt to support both the free market (when it comes to the Canadian Wheat Board) and supply management (when it comes to dairy farmers).

If open markets are so clearly in the best interests of grain farmers in Western Canada, why aren’t they also good for the dairy farmers of Quebec and Ontario? The answer, of course, is politics in a country where rural areas are still overly represented in the House of Commons. Supply management has become a proxy for rural entitlement and protection of family farms – a message that helped the Conservatives to a sweep outside the major cities in Southern Ontario in the May election. And by retaining the regime, Mr. Harper presumably calculates he will keep those seats four years from now.

There is no sound economic or policy rationale for keeping supply management. The government is sacrificing the interests of 34 million Canadians for the sake of fewer than 15,000 dairy and poultry farmers … Every year the distortions caused by the system grow larger. Canadians may not realize it when they go to the grocery store, but they’re paying twice the world average for dairy products – and up to three times what Americans pay. That’s a hidden $3-billion a year tax on all of us.